Strategic Marketing: Costa Coffee Case Study

This report discusses the marketing mix adopted by Costa Coffee, including product, price, place, promotion, people, physical environment, and process. It also explores the customer-based brand equity model and the concept of integrated marketing communication. Additionally, it covers effective marketing communication methods and marketing success measurements, along with recommendations for improvement.

Strategic Marketing

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
Marketing Mix Adopted by Costa Coffee...................................................................................1
Customer based Brand Equity Model..........................................................................................3
Integrated Marketing Communication.........................................................................................4
Effective Marketing Communication Methods...........................................................................5
Marketing Success Measurements and Recommendations.........................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic marketing is a method to present an organization different from other market
competitors by focusing on strengths and potential of company. This is important for
organization to present itself different form other brand to generate specific value in mind of
customer to improve business. Costa coffee is a coffee shop chain that is working on global level
(Moutinho and Vargas-Sanchez, 2018). This chain was founded in year 1971 by Bruno Costa
and Sergio Costa in London, England, United Kingdom. Head quarter of organization is in
Dunstable, England. Costa Coffee chain is providing coffee, tea, sandwiches, sweet snacks and
ice drinks to customers. This report is providing brief of marketing mix adopted by coffee chain
company to start new business in Romania. Concept of Integrated marketing communication is
explained for organization and marketing measures are considered in study.
TASK
Marketing Mix Adopted by Costa Coffee
Marketing mix a combination of different factors that can be used by organization to
influence the customers to purchase or consume the product of company. These factors in
marketing mix are product, prise, promotion, people, physical environment, process and place.
These factors can help the organization to improve marketing process.
Product -
The main point of attraction for customer they pay for product and service of company.
So, it is really important to full fill needs and satisfaction of customer by provide them with the
best product. Quality of product and services provided by organization in Romania will make
consumer to select product of company from various range of choice. This can help Costa Coffee
to improve business and gain high marginal profit.
Price -
Price of product is major factor for all organizations that are performing business in
global market. Price of product should be decided as per the standard and quality. This is
important to provide product and services to customer on relevant cost or charge in new target
market of Costa Coffee (Josephson, Johnson and Mariadoss, 2016). If customer will find the
price of product effective then they will prefer product of Costa Coffee. To penetrate new market
in Romania company can offer minimum hybrid cost of product to attract local people towards
company.
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Place -
Performance of company in market is based on positioning of product and services of
Costa Coffee. This includes how Costa Coffee can use the place to penetrate target market for
new business in Romania.. This is mainly consisting of distribution channel that is used by
organization. There are different methods of placing can be used by coffee shop chain that are
intensive, exclusive, selective distribution and franchising.
Promotion -
Promotion is a method that is used by organization to make the customers aware of
company product. This is very important for organization to convey the specification and quality
of product to attract them and encourage them to buy product and use services of Costa Coffee.
This can be done by using effective marketing policy and latest technology to make reach to
large amount of people to increase the number of customer Costa Coffee is serving every day.
People -
There are many people inside or outside the organization who are related to company
with mutual benefits and interests (Felix, Rauschnabel and Hinsch, 2017). These people are
employees, management and customers and other stakeholders. For organization employees and
management are source of profit. By providing best benefits to them can motivate them to
perform better and efficiently for Costa Coffee in Market of Romania.
Physical Environment -
Physical environment is related to the satisfaction level of consumer when they are
getting service of Costa Coffee. In modern day marketing organization different ways to provide
comfort to consumer. These methods are smart technology, easy company interface, smart
ordering method, and friendly environment in coffee house. This is how Costa Coffee can
improve experience of customer.
Process -
Process is also important factor for organization and customer both. People prefer healthy
and hygienic method of food process because they are particular about their health issues. That's
way they want the company to use fresh raw material and clean tools to process food products.
This can be use as advantage (Abratt and Bendixen, 2018). By preparing food product in front of
them by following standards of company. This will improve trust of consumer in Costa Coffee
and this will improve profit of organization.
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Customer based Brand Equity Model
Keller's Brand Equity Model
This model is also known as CBBE model (Customer Based Brand Equity Model). The
different marketing plans made by organization are focused on the customers and the only
purpose of organization is to keep their customer with their product and services. This can be
only achieved by making connection with customers. Keller have suggested a brand equity
model to make strong connection with customer to improve the brand value of organization.
There are different steps are shown in Keller's brand equity model that are explained as-
Brand Identity
Customer used to differentiate different product with the name of brand. To catch the eye
of customer it is important to improve the image of brand in market place. Popular and famous
imager can help Costa Coffee to attract more customers. This is how company can utilize the
identity of bran name as advantage.
Brand Meaning
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Illustration 1: Keller's Brand Equity Model
(Source: Hitesh Bhasin, 2018)

For a business organization it is important to make their customer aware of company and
specific information that is important for customer. This is important to provide them with proof
of existence of organization. Also, they need to make customer aware of features and quality
provided by company to them. This help customer to build trust in Costa Coffee.
Brand Response
There are many organizations are performing in market with same product that is sold by
Costa Coffee. For coffee chain company it is important to know the response of customer for
company. This will help them to evaluate the brand value of company in terms of customers.
Brand Resonance
This level is consists of the relation of organization with customers. Strong bond between
customer and company product support organization to gain more customers and equip high
brand value (Kumar, Sharma and Gupta, 2017). Brand resonance make the customer to create
certain high place in market as compare to other companied in market place.
Evaluation of CBBE Model
It is critically evaluated that Costa Coffee shop can use this CBBE model to established
business and perform with effective profit in Romania. The perspective of consumer will provide
better opportunities in business of Costa Coffee in Romania.
Integrated Marketing Communication
The integrated marketing communication is a method that is used by organization to
conduct promotion of company product and services. In this method company uses different
tools to communicate with customers. This communication process is important for Costa Coffee
to communicate with its customer to tell them about current information of company product.
Effective communication can make positive impact on customer to prefer Costa Coffee to buy
food product and use their services. For this purpose organization use different marketing tools
to perform effective promotion of company product.
There are various tools or marketing are used by organization. In traditional method of
marketing these tools are used by organization separately and individually to conduct promotion.
But in concept of integrated marketing communication the tools used by organization for
marketing are connected and interrelated to each other (DeTienne and DeTienne, 2017). The P's
of marketing mix are used to improve the marketing process of organization. In integrated
marketing method company make a general plan to implement marketing plan that includes all
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P's to perform collective marketing. Tools of marketing are used to convey the information of
product of Costa Coffee to customer. When the organization use all these methods within a
single plan for promotion it can be considered as integrated marketing. As the product launched
by organization company uses all this promotional methods to collectively attract customer of
different segment of target market. This can help company to full fill requirements of marketing
goal. In this process organization use advertisement, personal selling, interactive marketing, sales
promotion, events and experiences, direct marketing and PR and publicity to improve sales of
company. That is how Costa Coffee can use all these promotional methods of marketing process
to meet sales and profit goals with in deadline decided by company.
Effective Marketing Communication Methods
Advertising
Advertising is most common method of product and company promotion that is used by
all companies. For advertising of company product organization can use different methods that
are digital marketing, e-marketing, social media promotion and promotion through print media
and digital media. Most of the people now days are connected to social media and internet so
company can use these sources as promotion of company.
Sales Promotion
Before providing services to customer company follow long procedure to make available
product to customers. On the selling end or services end different methods are used by retailer or
service provider to improve sales of product and services. These extra efforts put by seller are
known as sales promotion. This generally includes discounts, coupons and sales contests to
attract consumers with these activities.
Public Relation
Public relation considered as non-personal communication related to company product
and service. This is the best method of promotion for organization because they don't have to pay
for promotions and the customer who are satisfied with company product perform marketing and
promotion of company product by telling others about quality and performance of service and
product. Test and quality of Food product of Costa Coffee can make the customer to praise the
product and service.
Personal Selling
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In the business of restaurant and cafe house organization make direct relation with
customer. In this strategy of business to customer the effectiveness of company services become
higher and company can perform marketing of product and services with better response of
customers.
These are some important methods of marketing that can be used by Costa Coffee to
perform marketing of company. All this factor together increases the productiveness of
marketing of company (French and Gordon, 2015). This is how brand equity based on customer
can help Costa Coffee to improve its marketing performance in market place.
Marketing Success Measurements and Recommendations
Organisations use various methods of marketing and it is important for them to evaluate
the success and effectiveness of each method of marketing. To measure effectiveness of
marketing tools some methods are known as Return on investment, cost per win, cost per lead,
conversion rate and incremental sales.
Return of Investment
A specific amount of capital is used by organization to perform marketing. The amount
of funds allocated to marketing is compared with cut to cut profit of organization to evaluate the
success rate of marketing strategy. For example if Costa Coffee is investing 1000 Euros in an
method of marketing and the marginal profit is more than a thousand, this will be considered as
success of marketing strategy.
Cost per win
in this method cost per sell is compared with the profit per sell this help the organization
to calculate overall profit that is recovered by selling product. Difference of profit shows the
effectiveness of marketing method.
Cost Per Lead
In this method of profit evaluation method success of a particular method is judged by the
lead made by organization to other competitors in market place (Lancaster and Massingham,
2017). If there is any lead made by organization in market place with marketing strategy it is
considered as success or effectiveness of method.
Conversion Rate
Different sales goals are decided by organization and the conversion rate of target help
the organization to evaluate performance of marketing method.
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Increment in Sales
In this method number of sales made by organization are used as measurement to
evaluate the success of marketing plan.
This is how different methods are used by Costa Coffee to find effective strategy for
marketing.
Recommendations
To evaluate find effectiveness of marketing policy company can use different tools that
can find the efficiency of marketing department of organization. Artificial Intelligence, and other
information system also can be used to improve the method of success and effectiveness
evaluation.
CONCLUSION
This report is concluding the importance of marketing mix that is used by costa coffee to
perform various marketing action. Consumer based brand equity model is evaluated to know the
value of brand and its product in context of consumer. Integrated marketing communication and
marketing tools used in IMC has been studied in report.
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REFERENCES
Books and Journals
Abratt, R. and Bendixen, M., 2018. Strategic Marketing: Concepts and Cases. Routledge.
DeTienne, K.B. and DeTienne, D.H., 2017. Neural networks in strategic marketing: exploring
the possibilities. Journal of Strategic Marketing. 25(4). pp.289-300.
Felix, R., Rauschnabel, P.A. and Hinsch, C., 2017. Elements of strategic social media marketing:
A holistic framework. Journal of Business Research. 70. pp.118-126.
French, J. and Gordon, R., 2015. Strategic social marketing. Sage.
Josephson, B.W., Johnson, J.L. and Mariadoss, B.J., 2016. Strategic marketing ambidexterity:
Antecedents and financial consequences. Journal of the Academy of Marketing Science.
44(4). pp.539-554.
Kumar, V., Sharma, A. and Gupta, S., 2017. Accessing the influence of strategic marketing
research on generating impact: Moderating roles of models, journals, and estimation
approaches. Journal of the Academy of Marketing Science. 45(2). pp.164-185.
Lancaster, G. and Massingham, L., 2017. Strategic marketing planning tools. In Essentials of
Marketing Management (pp. 402-425). Routledge.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Štefko, R., Kiráľová, A. and Mudrík, M., 2015. Strategic marketing communication in
pilgrimage tourism. Procedia-Social and Behavioral Sciences. 175.; pp.423-430.
Online
Hitesh Bhasin. 2018. [Online]. Available Through. <https://www.marketing91.com/kellers-
brand-equity-model/>.
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